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Business trends

Japan's convenience stores offer new perks to lure workers

Chains fight labor crunch with day care and cheap gadgets

Convenience store chain FamilyMart will offer part-time workers at its 17,000 stores in Japan discounts of up to 60% on Iris Ohyama's home appliances.

TOKYO -- Convenience store operators in Japan, facing a deepening labor shortage, are offering fringe benefits such as discounts on home electronics and on-site day care centers to attract part-time workers.

FamilyMart is partnering with home products maker Iris Ohyama to offer part-time workers at FamilyMart stores nationwide discounts of up to 60% on rice cookers and other appliances.

Trial runs of the discounts in Japan's northern Hokkaido and Tohoku regions have been popular with store owners and employees. FamilyMart plans to expand the benefits to more than 200,000 workers at its 17,000 stores across the country later this month.

The retailer said it will add food, daily necessities, travel and other products and services in the future. It plans to offer the discounts around four times a year.

Seven & i Holdings' Seven-Eleven Japan is also revamping its incentive system to attract and retain workers. In July, the convenience store operator opened a day care center for employees on the second floor of a store in the northern city of Sendai. It opened its first day care annex last autumn, hoping to attract working mothers. The Sendai outlet is the third to have such a facility.

Seven-Eleven, in April 2017, began offering discounts to part-time workers on hotels and travel services through employee benefit agency Relo Group. Employees at about 10,000 of its stores in Japan, or half the total, have used the services, according to Seven-Eleven.

Lawson, another chain, offers its employees discounts on CDs, DVDs and books handled by its group companies.

Convenience stores in Japan are hiring more foreign workers. At the end of March, Seven-Eleven, the largest chain, had more than 28,000 such workers on their payrolls as part-timers, an increase of nearly 40% from a year earlier and 7.4% of its total part-time staff.

The number of foreign part-timers at Lawson reached about 10,000 over the same period, an increase of almost 70% and over 5% of its total workforce. To retain foreign workers who are studying Japanese at language schools, Lawson offers flexible schedules.

The share of foreign workers was also around 5% at FamilyMart.

Many of Japan's convenience stores and other retailers rely on foreign workers.

The convenience store business is fiercely competitive in Japan. The seven biggest chains had a total of 55,483 stores nationwide as of the end of August, up more than 30% from 10 years earlier.

For the chains to open new outlets, they must maintain sales growth at existing stores. But that effort is hampered by difficulties in hiring and retaining workers.

The labor shortage is particularly acute in the retail sector. The job openings-to-applicants ratio for the industry, including part-time positions, was 2.59 in August, according to the labor ministry, far exceeding the all-industry average of 1.46.

The hourly wages of part-time workers are climbing in Japan across a range of industries. The average advertised wage for part-time workers in the Tokyo, Nagoya and Osaka areas was 1,039 yen ($9.25) an hour in August, according to Recruit Jobs. That was a rise of 2.4%, or 25 yen per hour, versus the same month a year earlier, setting a record for the third month in a row.

Pay for convenience store workers is rising as well, with the average advertised wage rising 2.7% on the year in August to 955 yen an hour.

The owner of a convenience store in Saitama Prefecture, just north of Tokyo, said he must pay more than 1,000 yen an hour to attract workers and said he could not offer higher wages only to new hires. "In the end, I will have to overhaul the hourly wage of all employees," he said, adding that his labor costs have risen by more than 10% over the past five years.

Until now, chain operators have left individual store owners to set their own employee wage and benefits packages, while promoting labor-saving tools such as self-checkout machines and IC tags. But as the scramble for workers intensifies, the operators are stepping in to offer more perks.

To deal with the labor crunch, companies in a variety of industries will have to take a two-pronged approach: promoting automation and working harder to keep employees happy.

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